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Corporate law Liquidation of a public organization

Taras Miroshnychenko

Head of practice

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miroshnychenko@prikhodko.com.ua

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Head of Corporate Law and Fintech Practice. Expert in the creation and reorganization of companies, support of M&A transactions, as well as legal support for opening and running a business in the EU, Asia, and North America.

Liquidation of a public organization

A public organization (GO) ceases its activities without transferring rights to others through liquidation. Voluntary liquidation of a GO occurs by decision of the governing body (general meeting) and only after the cancellation of the status of a non-profit organization in accordance with the procedure provided for by current law. The procedure for terminating the activities of a public organization is similar to the liquidation of a commercial company, with one difference – for the termination of an organization without the status of a legal entity.

When can a public organization (GO) be liquidated?

An NGO may be liquidated when:

first, the highest governing body adopts a relevant decision and subject to the majority of members voting for it (in the case of voluntary liquidation);
second, the organization decides to cease its existence through merger or accession to another legal entity;
third, the court has made a decision on forced liquidation in the event of systemic or serious violations of the law (for example, when an NGO, having the status of a non-profit organization, is actually engaged in the distribution of profits among members).

Important! Although this rarely happens, the law stipulates that if an NGO has no members for one year and this is provided for by its charter, it also ceases to operate. To learn more, we suggest ordering a consultation with our lawyer.

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Liquidation of a public organization with and without the status of a legal entity: what is the difference?

Unlike the full termination of the activities of an NGO as a legal entity, the liquidation of organizations without the specified status is simplified and provides for self-dissolution with prior notice. At the same time, the law does not establish a minimum term for such liquidation, as is provided for in the general case (not less than 2 months). Since an NGO without the status of a legal entity does not have its own balance sheet as a separate legal entity, the final package of documents for it will look like this: a notarized copy of the decision of the management body; liquidation reporting.

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What is the procedure for liquidating a public organization (NGO)?

Liquidation of an NGO with the status of a legal entity requires a clear sequence of actions:

making a decision. The general meeting, as the highest management body, adopts a protocol, which necessarily determines the composition of the liquidation commission and the deadline for filing creditors’ claims;
registration of the start of liquidation. An application and a decision are submitted to the state registrar, after which an entry is made in the Unified State Register (USR) about the organization being in a state of suspension. The specified documents must be submitted at the address of the location (except for cases when the NGO is located in an occupied territory or in a region where active hostilities are underway);
actions of the liquidation commission. In the course of performing its functions, the specified body works with debts to collect receivables, repay creditors’ claims, settle personnel issues, close bank accounts, prepare a liquidation balance sheet;
completion of the suspension of activities. The documentation of the NGO subject to long-term storage is transferred to the state archive, a certificate is issued in confirmation of which. After that, an application in the established form is submitted to the state registrar.

What documents are needed by the state registrar to enter information about the liquidation of the NGO?

At the final stage, the following documents are submitted:

first, an application for state registration of the termination of a legal entity;
second, a certificate from an archival institution on acceptance of documents for long-term storage;
third, a notification of the results of an unscheduled inspection of the State Tax Service.

It is worth emphasizing that the main time for liquidation is not the submission or preparation of documents, but the passage of inspections by state authorities – the tax service and the pension fund (regarding the payment of taxes and the accrual and transfer of the SSC). The total duration of the procedure can be from two months to one year.

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Liquidation of a NGO with the help of a corporate lawyer: what is offered?

By contacting a corporate lawyer of our company “Prikhodko and Partners”, you receive comprehensive support that guarantees legality, efficiency and the absence of any risks. Therefore, legal support for the liquidation of a public organization for interested clients will look like this:

Liquidation of a public organization

When can a public organization (GO) be liquidated?

Liquidation of a public organization with and without the status of a legal entity: what is the difference?

What is the procedure for liquidating a public organization (NGO)?

What documents are needed by the state registrar to enter information about the liquidation of the NGO?

Liquidation of a NGO with the help of a corporate lawyer: what is offered?

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